Japan International Cooperation Agency (JICA) (President: Akihiko Tanaka) has decided to issue the 75th (5-year), 76th (10-year), and 77th (20-year) JICA Bonds (Domestic FILP Agency Bonds), scheduled for issuance in September 2023, as “Disaster Prevention and Recovery Bonds” to use the funds raised for paid-in capital cooperation projects to support disaster prevention and natural disaster recovery. The bonds will be issued as “Disaster Prevention and Recovery Bonds” to provide funds to support paid-in capital cooperation projects for disaster prevention and recovery from natural disasters.
The issue is scheduled to be completed in September 2023. The details of the issue will be discussed with the co-lead managers (Note 1), while keeping a close eye on the market environment and other factors.
Natural disasters such as earthquakes, tsunamis, torrential rains, floods, and volcanic eruptions pose a major threat to the realization of human security, including the Turkey-Syria earthquake in February 2023 and the massive flooding in Pakistan in the summer of 2022 that inundated more than one third of the country’s land area. Developing countries in particular have accumulated little investment (infrastructure, human capital, etc.) for disaster reduction, which has led to increased loss of lives and economic losses due to disasters. Among natural disasters, floods and landslides caused by climate change, which have become more frequent and severe in Japan in recent years, are also causing significant damage in developing countries. In developing countries where urbanization is progressing rapidly, the risk of disasters is increasing due to uncontrolled development, population concentration in urban areas, and industrial concentration without sufficient risk reduction. In addition, the globalization of economic activities and supply chains in recent years has raised concerns about increasing disaster risks worldwide.
In order to achieve the organization’s mission, “Achieving Human Security and Quality Growth,” under the issue-specific business strategy “Disaster Risk Reduction through Disaster Reduction and Recovery,” the Organization is working to strengthen systems that will enable developing countries to independently expand investment in disaster risk reduction in the future. Specifically, we are supporting the development of disaster prevention infrastructure, strengthening disaster risk management capacity, and promoting “Build Back Better,” in which efforts are made to reduce future disaster risks in the process of post-disaster recovery and reconstruction. This support is based on Japan’s unique disaster prevention technologies, policies, systems, and knowledge based on the country’s experience with many natural disasters and its constant efforts to build a disaster-resistant society.
The threat of natural disasters is a common issue worldwide. In order to further strengthen our efforts for disaster prevention and recovery from natural disasters, JBIC is issuing these bonds as its first “Disaster Prevention and Recovery Bonds”.
On April 7, 2023, JBIC released a new “JICA Social/Sustainability Bond Framework” and obtained a second party opinion from Moody’s. The Bonds will be issued as Sustainability Bonds under the Framework, and the funds to be raised through the Bonds will be allocated to paid-in capital cooperation projects to support disaster prevention and recovery from natural disasters (except for loans to coal-fired power generation projects).
In addition, the sustainability bonds issued by MHCB are positioned as financing to secure the funds necessary to achieve the SDGs in Japan’s “Revised Guidelines for the Implementation of the SDGs” (Note 2).
The bonds are scheduled to be listed on the TOKYO PRO-BOND Market. However, since the bonds are FILP agency bonds, which are exempt from Chapter II of the Financial Instruments and Exchange Act, and do not fall under the category of private placement for specific investors, they can be sold to all investors, including general investors. There are no restrictions on transfer, and the same treatment applies to secondary market transactions.
(Note 1)
75th JICA Bonds (5-year bonds)
Nomura Securities Co.
Daiwa Securities Co.
Tokai Tokyo Securities Co.
No.76 JICA Bonds (10-year bonds)
Nomura Securities Co.
SMBC Nikko Securities Inc.
Daiwa Securities Co.
Tokai Tokyo Securities Co.
77th JICA Bonds (20-year bonds)
Daiwa Securities Co.
SMBC Nikko Securities Inc.
Shinkin Securities Co.
Mizuho Securities Co.
(*Alphabetical order except for the administrative lead managers)
(Note 2) In the “Revised Guidelines for Implementation of the SDGs (December 20, 2019, partially revised)” decided by the Headquarters for Sustainable Development Goals (SDGs) Promotion established in the Cabinet (headed by the Prime Minister), “ESG finance and impact finance that consider environmental, social and governance factors, Accelerating the expansion of finance that considers not only economic returns but also social returns, such as social finance, SDG finance, and the issuance of JICA bonds as social contribution bonds, is important for mobilizing private-sector funds to achieve the SDGs. The Japanese government will promote measures to create an environment for this purpose and encourage the private sector to take action.
(In charge)
Finance Department Finance Section 1
(tel: 03-5226-9279)
© Source JICA
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